CIL aims to build up 45 MT stock at power plants by FY22-end

The target for the stock at the plants would match the previous highest-ever stock in power plants, achieved in 2020.  CIL’s current pit head stock of 31.3 MT is expected to grow rapidly with production ramped up in the last quarter.

The company wants the stock from its sources to go up to 25 MT by December-end.
The company wants the stock from its sources to go up to 25 MT by December-end.

PSU miner Coal India (CIL) aims to build up coal stock of at least 45 million tonne (MT) at power plants and of over 70 MT at its pit head by the end of this fiscal.

The target for the stock at the plants would match the previous highest-ever stock in power plants, achieved in 2020.  CIL’s current pit head stock of 31.3 MT is expected to grow rapidly with production ramped up in the last quarter.

A CIL official said the indigenous coal stock target was set following a workshop by coal secretary Anil Kumar Jain with senior officials of CIL and its subsidiaries, with the aim to maintain steady supply of coal to power plants during the summer and monsoon months. Import substitution has also been a focus area.

At the end of FY21, CIL had pit head stock of around 100 MT, which CMD Pramod Agrawal said “is not an ideal stock situation”. Huge pit head stocks have a high chance of catching fire, and the quality of the coal declines due to exposure to the open skies for a long time.

Agrawal had said earlier that the ideal pit head stock situation would be around 70-75 MT. Stock enhancement at thermal power plants by the end of the fiscal has been based on a projection considering the average coal fired power generation of previous five years from December to March, and increased by 7%, a CIL executive said.

Officials said, however, that the 100 MT pit head stock did help CIL rush coal to power plants facing shortage in October. With enhanced supply, the current indigenous coal stock at the power plants is around 20 MT, most of it supplied by CIL. The company wants the stock from its sources to go up to 25 MT by December-end.

Rajiv Agrawal, secretary general of the Indian Captive Power Association, said power plants build up coal inventory and coal offtake falls, leaving CIL saddled with huge pit head stock. But when there is coal crunch at the plants of independent power producers (IPPs), CIL starts diverting its entire supplies to the IPPs, depriving captive power producers (CPPs) that have FSA linkage with CIL, and the non-power sector. E -auction offers are also reduced, putting CPPs and non-power consumers under stress. This cycle happens every three-four years, he said.

Meanwhile, a CIL executive said that though the company’s coal sale dues have come down till November-end, the dues are still substantial, especially from state generators, creating a liquidity crunch in some of its subsidiaries like WCL, ECL and BCCL. All these subsidiaries require a large capex push, the executive said.

 CIL’s current despatch trend indicates it is on track for record supply to the power sector by the end of the fiscal, overtaking 491 MT recorded in FY19. Despatches to power plants peaked to a record 340 MT progressive at the end of November, posting a 23% growth with a volume increase of 62.6 MT, on a year-on-year comparison, the miner said.

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